Investors’ aspirations and portfolio performance

Camille Magron

Finance Research Letters, 2014, vol. 11, issue 2, 153-160

Abstract: Based on a large database of individual investors, I analyze the impact of personal financial goals on portfolio performance. I stress the role played by latent investor aspirations as defined in the Behavioral Portfolio Theory framework. I identify two opposite profiles of investors. High-aspirations investors trade more and hold riskier portfolios than the average investor. By contrast, low-aspirations investors are more diversified than the average investor. I find that when controlling for diversification, turnover and usual risk factors, high-aspiration investors underperform their peers, whereas low-aspirations investors outperform them.

Keywords: G10; G11; G12; G19; Individual Investors; Portfolio performance; Behavioral Portfolio Theory (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:11:y:2014:i:2:p:153-160

DOI: 10.1016/j.frl.2013.09.001

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